Commerce Accountancy

Accounting Principles and Practices

2,324 Questions

Accounting principles and practices involve the preparation of trial balances, ledgers, and bank reconciliation statements. This area tests your knowledge of fundamental accounting concepts and routine business transactions. It is a core section in commerce exams and various competitive tests.

Ledger accountsTrial balance preparationBank reconciliation statementAccounting conceptsPrimary books of accounts

Accounting Principles and Practices Questions

Multiple choice

When cash is received on account, the amount is recorded in the

  1. Sales Credit column and Cash Debit column

  2. General Debit column and Cash Credit column

  3. Accounts Receivable Credit column and Cash Debit column.

  4. General Debit column and Accounts Payable Debit column
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

Receiving cash on account reduces an asset (Accounts Receivable) and increases another asset (Cash). This is recorded by debiting Cash and crediting Accounts Receivable.

Multiple choice

A single line ruled across the journal's amount columns indicates

  1. the date is the last day of the month

  2. the totals have been verified as correct

  3. that columns are to be totaled

  4. none of these
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

A single line drawn across amount columns indicates that the numbers above are to be added to reach a subtotal or total.

Multiple choice

The recording of debit and credit parts of a transaction

  1. journalizing

  2. proving cash

  3. checking

  4. double-entry accounting
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

Double-entry accounting is the system where every transaction affects at least two accounts, requiring both a debit and a credit entry to maintain the accounting equation.

Multiple choice

A form for recording transactions in chronological order

  1. journal

  2. invoice

  3. entry

  4. sales invoice
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

A journal is the book of original entry where transactions are recorded in chronological order. It is the first place a transaction is recorded in the accounting cycle.

Multiple choice

Recording transactions in a journal

  1. writing in a diary

  2. writing

  3. journalizing

  4. invoice
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

Journalizing is the formal process of recording business transactions in a journal.